Untitled Flashcards Set

AQA A-Level Business: Budgeting

1. What is a Budget?

• A budget is a financial plan that outlines expected revenues and expenditures over a specific period.

• Used for planning, decision-making, and financial control.

2. Types of Budgets

• Income Budget: Forecasts expected revenue from sales and other sources.

• Expenditure Budget: Estimates business costs, including fixed and variable costs.

• Profit Budget: Calculates expected profit (Revenue - Costs).

3. Importance of Budgeting

• Helps in financial planning and control.

• Prevents overspending.

• Encourages efficiency.

• Facilitates performance evaluation (variance analysis).

4. Methods of Budgeting

• Historical Budgeting: Based on previous financial data.

• Zero-Based Budgeting: Every expense must be justified from scratch.

• Incremental Budgeting: Adjusts last year’s budget by a percentage.

5. Budgeting Process

1. Set objectives: Define financial goals.

2. Research market trends: Forecast sales and costs.

3. Set departmental budgets: Allocate resources.

4. Monitor performance: Use variance analysis to compare actual vs. budgeted figures.

5. Make adjustments: Adapt to changes in revenue or costs.

6. Variance Analysis

• Favourable Variance: Actual results better than budgeted (e.g., higher revenue or lower costs).

• Adverse Variance: Actual results worse than budgeted (e.g., lower revenue or higher costs).

• Causes of Variances: Market changes, economic factors, operational efficiency, unexpected costs.

7. Limitations of Budgeting

• Relies on forecasts, which may be inaccurate.

• Can be time-consuming.

• May lead to short-term focus over long-term growth.

• Unexpected external factors (inflation, competition) can impact effectiveness.

AQA A-Level Economics: Contestability

1. What is a Contestable Market?

• A market where there are low barriers to entry and exit, meaning that new firms can easily enter and compete with existing firms.

• The threat of "hit-and-run" entry keeps firms efficient, even if few firms exist.

2. Characteristics of Contestable Markets

• Low barriers to entry & exit (e.g., no high sunk costs).

• Low customer loyalty (so new firms can attract customers).

• Access to technology and resources (so new firms can compete).

• Lack of economies of scale advantages for incumbents.

3. Barriers to Contestability

• High sunk costs (e.g., advertising, R&D).

• Economies of scale (existing firms may have cost advantages).

• Legal barriers (e.g., patents, regulations).

• Brand loyalty (customers may stick to known brands).

• Predatory Pricing (existing firms cut prices to drive out new entrants).

4. Implications for Market Behaviour

• Even monopolies may act like competitive firms to avoid new competition.

• Normal profits are more likely (since high profits attract new entrants).

• Productive and allocative efficiency improve due to competition pressure.

5. Policies to Increase Contestability

• Reducing licensing requirements.

• Encouraging innovation and access to finance.

• Breaking up monopolies or deregulating industries.

• Tougher anti-competitive regulations.

6. Real-World Examples

• Airline industry (easyJet vs British Airways).

• Retail banking (new digital banks vs traditional banks).

• Ride-sharing (Uber vs traditional taxis)—Uber entered the market easily due to low fixed costs.

AQA A-Level Media Studies: Newspapers

1. The Role of Newspapers

• Informing the public about current events.

• Shaping public opinion through editorials and biased reporting.

• Acting as a watchdog against corruption and government power.

2. Types of Newspapers

• Broadsheet (The Times, The Guardian) – Serious tone, formal language, focuses on politics & global issues.

• Tabloid (The Sun, Daily Mirror) – Sensationalist, informal language, celebrity gossip, and entertainment.

• Mid-market (Daily Mail, Daily Express) – A mix of serious and entertainment news.

3. Ownership and Control

• UK newspapers are owned by large conglomerates (e.g., Rupert Murdoch’s News UK owns The Sun and The Times).

• Concerns about bias – Owners may influence editorial stance.

• Media plurality issue – Few companies own most media, reducing diverse viewpoints.

4. Regulation of Newspapers

• IPSO (Independent Press Standards Organisation) regulates the press but is voluntary (not all newspapers follow).

• Leveson Inquiry (2011) exposed unethical journalism (e.g., phone hacking scandal by News of the World).

5. Funding and Revenue Models

• Advertising (Google & Facebook took over ad revenue, reducing print profits).

• Subscriptions & Paywalls (e.g., The Times, The Guardian).

• Government subsidies (some state-funded publications).

6. Influence of Digital Media

• Decline of print newspapers due to free online news.

• Rise of citizen journalism (social media, independent blogs).

• Fake news & misinformation spreading online.

• Algorithms & echo chambers – People see only news that aligns with their views.

7. Audience Theories Applied to Newspapers

• Uses & Gratifications Theory (Blumler & Katz) – People choose news that suits their needs (e.g., information, entertainment, personal identity, social interaction).

• Reception Theory (Stuart Hall) – Readers interpret news differently based on their background.

• Hypodermic Needle Model – Media can inject ideas directly into a passive audience, influencing opinions.